The Warriors managed to stay under the luxury tax line by $13 million in 2016-17 en route to their second championship in three years, thanks to the incredibly cheap contract of two-time MVP Steph Curry and locking Draymond Green and Klay Thompson into deals prior to the 2016 cap jump. Golden State will not remain that fortunate next year, as they are staring a significant tax bill in the face for however long they keep together this current core group that constitutes the NBA’s most formidable super team.
Golden State is headed into a new $1 billion arena, The Chase Center, in 2019 and it’s fitting that their newest arena sponsor is a bank. Not only is the new arena going to cost a billion, but keeping together this core group for any extended period of time is expected to break the bank to the tune of over $1 billion.
That’s according to The Vertical’s front office expert Bobby Marks, who broke down the future tax crunch facing Warriors ownership fi they want to continue racking up titles. According to Marks, with the structure of their four star player’s contracts, they can very well keep this core group together for the next four years without having to do any significant cap dancing. With Kevin Durant planning to take a short-term deal for less than the max this year, they will be set up to use Bird rights to go over the cap to sign their four stars to max deals — two to 35% maxes and two to 30% maxes, over the next three years.
Here’s the problem with that plan. It will cost an estimated $1.4 billion, according to Marks’ calculations. You can read his full, year-by-year breakdown of how the Warriors get to that cost here (it’s an excellent look inside the wild world of the NBA’s luxury tax and CBA), but here’s the basic gist of what happens to get Golden State to that ridiculous price tag.
2017-18: Steph Curry signs a full max, starting at $35.3 million next season. Kevin Durant inks a deal for $31.4 million (within cap space) with an opt out for 2018. Andre Iguodala, Shaun Livingston, Ian Clark return for approximately $32 million combined. Total spent: Approximately $240 million
2018-19: Durant signs his 4-year max, starting at $35.7 million to join Curry’s max. Total spent: Approximately $300 million
2019-20: Thompson gets max, starting at $32.1 million, joining Durant and Curry. Total spent: Approximately $400 million
2020-21: Green gets max, starting at $33.7 million, joining the other three max deals. Total spent: Approximately $444 million
Add all that together, and you’re looking at just south of $1.4 billion due to the luxury tax repeater penalties. The exact number will be contingent on how much the rest of the Warriors’ roster will cost, and they can lower those tax penalties by doing things like letting Andre Iguodala walk — as they are rumored to be considering. However, in any case, the Warriors are going to end up going out of pocket for well over $1 billion over the next few years if they decide to keep this group together and chase history in the form of multiple championships.
The thing is, for a team that’s seen its valuation increase by 37 percent from 2016 to 2017, going from $1.87 billion to $2.6 billion and is likely to only get bigger, that seems like a worthy price to pay to remain the NBA’s most dominant team.
